How is Insurtech Going to Transform the Insurance Industry?
Insurtech is gaining significant importance nowadays where a bunch of innovative, modern technologies are set to revolutionize the conventional insurance industry. Implementation of internet of things (IOT), blockchain, artificial intelligence (AI), and others providing pristine ways to maximize efficiency and enhance the overall customer experience.
Digital technologies are prevalent in almost every realm of modern world. There has been a subsequent increase in the rate of digitalization across the globe, owing to the increasing standard of people across the globe, presence of better internet connectivity, and persistent advancements in technologies across the globe. Availability of high disposable income among people living in developing and developed countries has enabled people to invest in real estates, cars, etc. they also tend insure their valuable assets in case of any invasions, natural or man-made disasters, and others. The sudden climate changes and increase in the prevalence of man-made disasters like fire explosion, nuclear explosion, terrorist attacks, gas leaks, and others. The occurrence of COVID-19 has significantly impacted millions of people’s lives across the globe. Hence, the number of health insurance worldwide has also surged after the pandemic.
Startups and established companies are rigorously investing billion of dollars in the Insurtech innovation programs so as to give a much improved, seamless experience to the customers, and further modernize the industry with the help of trendsetting technologies. With the increasing prevalence and application of modern technologies like machine learning, chatbots, blockchain, business process automation, AI (artificial intelligence), IOT (internet of things), and other, insurance companies are reducing human factor, minimizing risk, and enhance customer experience. According to the reported published by Research Dive, the global Insurtech market is expected to generate a revenue of $57,934.0 million by 2028, growing exponentially at a CAGR of 29.1% during the forecast period 2021-2028.
What is Insurtech?
Insurtech refers to the use of technological innovation and advanced digital tools to enhance the performance of the insurance companies by delivering an optimized customers experience and unlocking the true potential of pioneering analytics. The word insurtech is made up of two words namely, “insurance” and “technology”, inspired by the term fintech. Hence, it is a combination of insurance and technology to bring about revolutionizing solutions into the business.
Reasons Why Insurtech is at the Centre of Innovation?
Technological innovation is paving the way for insurance companies to optimize their processes so as to incline more towards the customer, their experience coupled with their needs and expectations. Hence, the insurance companies have maximized the ability to gather more accurate data in order to make better decisions, mitigate risks whilst pushing the costs lower. Insurers are consistently maintaining customer engagement by developing lifestyle applications that are capable of providing supplementary value to the customers on a long- term basis. In addition, availability of advanced data analytics capabilities plays a pivotal role for companies in the insurance industry. Data analytics provide an exhaustive insight of the customer, forecasting their need, demands, preferences, potential risk parameters to get the optimum outcome. Hence, data analytics will soon become a significant requisite in these modern digital times.
With the help of IOT, insurers can gather a plethora of data by implementing asset tracking, environmental sensors, vehicle telematics, home security, and others. The insurance companies are among the earliest adopters of the IOT technology, owing to its immense power and reach so as to effectively collect intrinsic data about the customers. Hence, insurers are able offer appropriate packages depending upon the genuine use and behavior of the customer instead of relying on averaged statistics.
Why is Insurtech the Future of the Insurance Sector?
Insurance companies across the globe are scrupulously investing in the modern advanced technologies and innovative digital solutions to comprehensively advocate risk monitoring, claim processing, risk mitigating, loss prediction and prevention. In addition, integration of modern technologies like AI, cloud computing, blockchain, and others efficiently help in providing an optimized experience to the customers. These user-friendly technologies were of paramount importance, especially at the time of pandemic where all the safety and social distancing standards were to be abided during lockdowns. Hence, the COVID-19 has had a positive impact on the growth of the global insurtech market. Moreover, remarkable developments in economies of various countries across the globe and increasing investments to thrive digital transformation is further expected to drive the growth of the insurtech market in the coming years.
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